The Startling Reason CVS Employees Need a Raise
You won't believe how much more the company's CEO makes than its employees.
If you’re a typical worker at CVS Health, the CEO of your company makes about 434 times what you do.
That disparity recently landed CVS the number-one spot on a list of companies whose workers deserve a raise. Analysts at the website 24/7 Wall St. examined data for 168 companies and 50 made the list.
Exactly how much more money did CVS CEO Larry J. Merlo make than the average CVS employee? Merlo took home $12,105,481 in cash, while the annual pay of an average worker at the pharmacy chain was $27,900. That doesn’t include Merlo’s stock options and bonuses, which upped his total compensation to $22,855,374. (The figures are from 2016). This map shows the average salary in every state.
By comparison, HCA Holdings ranked fiftieth on the list. The health care services company’s CEO, R. Milton Johnson, took home $5,604,403 in cash in 2016, with a total compensation of $13,970,215. The median worker’s salary at the company, which owns hospitals and surgery centers around the United States, was $56,100, making the ratio between CEO and employee wages 100 to 1.
The gap between CEOs and average workers has widened significantly over the past few decades. From 1978 to 2017, payouts to CEOs at the 350 largest companies in the United States increased by more than 1,000 percent, according to 24/7 Wall St.’s calculations. Meanwhile, the salaries of the average employees have remained relatively flat over the same time frame, going up by only about 11.2 percent. Here’s how much the average person earns in their lifetime.
What do those percentages look like in take-home pay? The average CEO at a Fortune 500 company earns a base salary of more than $10 million. Stock options and bonuses nearly double that income. By contrast, the average full-time worker in the United States makes about $45,550 every year. Find out the things HR won’t tell you about salaries and raises.
Merlo, a former pharmacist, took over as CEO and president of Rhode Island-based CVS Health in 2011. The company has more than 9,800 pharmacies, 1,100 walk-in clinics, and provides drug benefits to more than 94 million people, according to its website. In 2017, the company took in $184.8 billion in net revenues. Last week, the U.S. Justice Department approved CVS Health’s $69 billion bid to buy insurance giant Aetna.
Here are the other companies that made the top ten:
- CBS: CEO to worker wage ratio (cash): 395 to 1. (CEO Leslie Moonves resigned in September.)
- Walt Disney: 367 to 1.
- TJX Companies: 327 to 1.
- Twenty-First Century Fox: 311 to 1.
- Comcast: 301 to 1.
- L Brands: 285 to 1.
- Honeywell International: 279 to 1.
- Pepsico: 259 to 1 (CEO Indra K. Nooyi resigned earlier this month)
- Wynn Resorts: 238 to 1.
Next, find out the highest-paying job in every state.